209 Relocating to Latin America

[Richard Bexon]

Again, it's not live anyway, but we'll do the podcast and then just have a chat afterwards if you want to. Yeah. Cool.

Awesome. Well, I'll pause, say good morning, and then we'll get started. Okay.

[Pablo Arias]

Sounds good.

[Richard Bexon]

Fantastic. Good morning, Pablo. How are you doing?

[Pablo Arias]

We're doing great. How are you?

[Richard Bexon]

Yeah, very, very good. It's a pleasure to have you back on the podcast, sir.

[Pablo Arias]

Thank you. It's always a pleasure. Always, always a pleasure.

Not at all. Not at all.

[Richard Bexon]

You guys do great work. So it's a wealth of information, so it's always good to get you on here and share some of that with the listeners.

[Pablo Arias]

Yeah. Thank you. Thank you so much.

I think the community back us up.

[Richard Bexon]

Exactly.

[Pablo Arias]

That's what I would say.

[Richard Bexon]

Well, the first question I'd love to ask, Pablo, is that markets have had a good start in 2024. We're beginning to see a little bit of softening here in Costa Rica. What are you seeing happening in Costa Rica?

[Pablo Arias]

Okay. The data I have, it doesn't mean everybody. Because not everybody is my customer base out of, let's say, 100% of people who are looking to move or invest in Costa Rica.

Maybe only 5% of them are going to be my customers. I have seen, this is our personal thing, I have seen an increase on sales. Like in this quarter, we're selling more than last year.

But once again, I'm not meaning everybody is my customer. So out of my customer who is paying $10,000 and up for an international move, we're selling more. And not just Costa Rica, also Panama, also a little bit in Mexico.

So I think it's what's happening in the US, the feeling of they want to make a move or they want to move out or they want to diversify on their money investments. I think that has to be something with it.

[Richard Bexon]

Yeah. I mean, it's definitely, you know, we did a podcast called Plan B a while back. But I think Costa Rica is definitely becoming people's Plan A or Plan B.

[Pablo Arias]

Yep. Yeah. 100%.

We have consultations with customers, about 66 consultations per month.

[Richard Bexon]

Yep.

[Pablo Arias]

A big chunk of these people are always thinking, you know, I have to have another plan. It's a big, I cannot tell you a percentage of how many of them are telling me, oh, I want to make the move. I want to start setting roots somewhere else.

But it's a big chunk. I can definitely see people are looking to get a second passport, second nationality, second banking. Yeah.

Definitely. After COVID, this is an increase. I've seen it more and more.

[Richard Bexon]

Yeah. And I don't think it's going away. I think with, you know, where the world is at the moment, you know, it's Latin America.

I like to call it the new frontier. It's the new world. Everything is new here.

I was starting to see a migration of people from home countries to this part of the world. But you'd mentioned that in Mexico, you'd mentioned Panama, you'd mentioned Costa Rica. I know that you do shipping kind of in many, many different countries.

I mean, you'd mentioned the word 66 consultations. If you were to split them between the countries at which you're looking at, or just say in general this year so far, I mean, how would you allocate those percentages to the countries? Where is that?

[Pablo Arias]

That's very easy for me to answer because I have a big community in Costa Rica. Yeah. So most of the people that come to me by our services are going to be, they're moving to Costa Rica.

But when I look at the numbers from other resources, international leaving, internations, other places that I get data from, I see a lot of people are moving to Mexico. They're losing this fear of, oh, Mexico is too dangerous, kind of like losing that fear. It's kind of easy.

It's an easier move in so many ways to do immigration into Mexico. Some people would say it's less expensive. So whoever comes to Costa Rica is definitely not just because of the money or not just because it's easy.

There are other reasons why Costa Rica has a lot of advantages. So say Mexico is a big player, Costa Rica is a huge player, Panama is also a big player. That's what I have seen so far.

There are other players out there, Colombia, Uruguay, I think for taxation purposes, there is some tax incentives for Uruguay. Spain and Portugal, Portugal has been very popular for over the last decade or so. It's a, I'll say an easier way for investors to get a European passport.

So that's why Portugal has been easier, but it's like $400,000, $500,000 investment. So it's a big investment. It's not a little investment.

That's what I have seen. Those are the top five places I've seen are getting requests.

[Richard Bexon]

But you would say the majority of your businesses still demand this for Costa Rica. Yeah. A hundred percent.

Okay. Yeah. I mean, look, I mean, you know, what is the country that you're seeing?

You know, what's the next Costa Rica or what's the next Portugal, in your opinion, Pablo? I mean, people are always looking for this. I'm just intrigued myself, but like, what do you think?

[Pablo Arias]

This year, Colombia has, is starting to get in the list in the top 10. And I visited Colombia early this year. It has everything.

Colombia has everything, just like Costa Rica, good place, good people, good food, cost of living is better than Costa Rica. So I see Colombia as a place where more and more people are going to get into. It's complex in a sense of immigration.

It's complex in a sense of international shipping and moving, very bureaucratic. A lot of rules.

[Richard Bexon]

More bureaucratic than Costa Rica?

[Pablo Arias]

Well, yeah. More expensive.

[Richard Bexon]

Wow. But the cost of living is considerably less, of course. I mean, Costa Rica is probably the most expensive, no?

[Pablo Arias]

Yeah, I will say, but that comes with the good side of it. You know, you are worried about health care. You go to health care to a public, public versus public, Mexico, Costa Rica, Costa Rica, 100%.

Yeah. Like in Mexico, you go to a public clinic. They will not even have the, you know, any resources to, you know, they go, like, go to the pharmacy and bring what I need and then I take care of you.

Yeah. In Costa Rica, all this is like, yeah, you don't have to pay anything. Yeah.

I always, I always go to my time in the hospital here in Heredia, three weeks in the hospital. That could have cost me $30,000, any other place, and it's a pretty decent service. I mean, it's not a luxury hotel, but I'm alive and it could have cost me about $30,000.

It's like a Best Western. It's decent.

[Richard Bexon]

Yeah, exactly. Can you explain a little bit about what you guys do, Pablo, because it's called International Relocation Partner, right?

[Pablo Arias]

Yeah, that's confusing, right?

[Richard Bexon]

So people- Not at all. Just explain to the listeners kind of what it is that you do.

[Pablo Arias]

So super simple. We do international moving services. Shipping is our core service, but we specialize and we specialize in a very niche particular market of the people that is in the US or Canada.

Some of them from Europe that are moving into Costa Rica. Costa Rica is our primary destination. So we help people do their international move, logistics, containers, customs, export, import.

We call it a relocation company when you think about an international relocation company. It's more like if you go to a corporate site, it's more like, oh, we give you housing, we give you immigration, we give you many other things. We don't do any of that other than provide content, information, and contacts.

People come to us and we have a list of service providers that we like to refer. I was like, you need this? Okay, here we go.

I'd like to introduce you. And we don't take commissions for that. So that's why we call ourselves International Relocation Partner.

But the only thing that we actually invoice is the shipping part, an international move. What are the most common questions that you get about shipping? There are many questions.

A lot of people do not even make the right questions because they think it's as easy as moving from one state to the other. But one of the ones that I get the most is, is it worth it? Is it worth it?

Yes or not? And that will change depending on the market. Let's say you live in a big city, New York or whatever, a big, big city.

You have access through Amazon to buy anything you might want. And maybe 30 different brands. So you move to Costa Rica, you may only have one, if you like, I don't know, golf, you may only have one brand and it may be very expensive.

So the smaller markets like Costa Rica, there are a lot of things that are worth it because you are not going to find what you're used to in the United States. And if you specialize hobbies, if you're like, if you are into a specialized hobbies, you come here like, I don't have any of that. If you love cooking or you like me, I like espresso, coffee, having a DC machine, I get this, you know, accessories.

You won't have that here. So there are a lot of products that are worth it. It's a good idea to do an international shipment.

There's some families that, you know, a bedroom or a living room set is like $5,000, $10,000. Of course, that's worth it for you to bring. What you find in the local market, so people will say, oh, you can just sell everything and buy everything.

Some people, yeah, some people, but not everyone. There are some people that has their taste, they have their quality things, they pay for our services. So that's one of the most common questions.

Is it worth it or not? The same thing with cars. This is a very common question.

Should I import my car? And I always say nine out of 10, it's not worth it. That's my answer.

[Richard Bexon]

That's my answer as well.

[Pablo Arias]

I don't want you to pay for my services if it's not going to be worth it and explain why. Even if you end up saving, let's say $1,000, it's not worth it because the entire process is like three months, then customs, then getting it registered, then, you know, all of these different bureaucratic steps, which we help our customers to do, but it takes a lot of time, energy, taking the car to the mechanical inspection, to DECA, then go to the register to get the license plate, then go to the INS to pay them our charm or get the sticker, all of these different things. It's stressful. Saving $1,000, sometimes people are like, oh, I'll save you $1,000.

But then when they come here, they have to rent a car. Correct. There you go.

You lose your money.

[Richard Bexon]

Yeah. I think unless you've got like some form of like, I don't know, if you've got some like SUV that you're in love with, it's like a Jeep Wrangler that you've done up over the years or stuff. And like, do you sit there that like have your particular tastes?

Yeah. My advice always is, yeah, just sell it and buy something here in Costa Rica.

[Pablo Arias]

It's just more practical. If you have the car, you can sell it. And also a lot of the vehicles for the U.S. market, Canadian market or European market are not a good fit for the local infrastructure in Costa Rica. There are not enough parts. There's not enough mechanics experience on some of the American models or European models. So it makes sense to sell it just out of the get go.

Now, I'm going to make the exception to say, if you qualify for the import tax extenuation of the law 9996, then it's well worth it. You know, I have customers that have saved $20,000 on the import tax fee.

[Richard Bexon]

Yeah.

[Pablo Arias]

So, but not everybody qualifies for that.

[Richard Bexon]

How do you qualify for it Pablo?

[Pablo Arias]

There are out of the 22 immigration categories, there are three that allow you to access to this benefit. So it's investor.

[Richard Bexon]

Yep.

[Pablo Arias]

Then you have the retiree or rentista. Rentista means that you have a recurring income and that you're able to prove that you have this recurring income. But always make sure you talk to your immigration attorney.

I'm not an immigration attorney, but for customs, these are the three things that I need. But the process itself with immigration could take a year. So it's one of those things you have to decide.

And now there's something else to it. This law is about to expire. I think we have about two more years before it expires.

It was a law that is a temporal law to incentivate the local economy and to attract investments. And it has been already three years or two years, I mean, two years and a half, almost three years. So in two more years, it's going to go away.

[Richard Bexon]

Yeah. I think that's something for people to bear in mind that again, today, if you're going to take advantage of it, it's going to take you a year to get residency and then you've got to import stuff. So you better get moving pretty quickly.

That's correct. That's what I'm trying to say. Yeah.

[Pablo Arias]

I didn't want to say it that way. That's fine. No, no, no.

[Richard Bexon]

It's fine.

[Pablo Arias]

It's if somebody wants to take this advantage, you can import two vehicles and your household goods import tax-free. Just to give you an idea, your household goods, you can save $3,000, $5,000 on import taxes on your household goods.

[Richard Bexon]

Yeah.

[Pablo Arias]

It just depends on how much things you have and what are they worth. Yeah. But yeah, it's good savings.

[Richard Bexon]

Yeah. I mean, importing goods to Costa Rica, I would never suggest that anyone tries to do it on their own. You'll just get lost and end up paying a bunch of fees and yeah.

[Pablo Arias]

I have different reasons why people need to use a professional international moving company that has experience on the destination country, not just Costa Rica. But the first one is the moving industry. It's a really rough industry.

It's an industry you don't want to trust any mover. Like it's one of those things. There is a report the Better Business Bureau has in the United States that says, you know, ambulance chase attorneys, used car salesmen, and movers have the worst reputation.

This is like that. Remember last time I checked this landing page for the Better Business Bureau in the United States, they have over like 3,000 cases of claims of like movers not delivering on what they offer, or they charge you $1,000 and then all of a sudden it's $3,000 because the volume changed, many different issues like that. So this is an industry that just alone within the United States or just alone within Canada, it's a rough industry.

Now you add to that international shipping, international legislation, the bureaucracy of Costa Rica or the bureaucracy of Colombia, you really need to pick and choose who you want to dance this dance. Otherwise, you can be really stuck into troubles. Somebody could come with an additional charge of $5,000, or if you don't know what you're doing, then you could be paying a fine of an additional $5,000 because you didn't know.

[Richard Bexon]

Yeah. No, again, it's complicated. I mean, I think anything that touches government institutions in Costa Rica, seek out an expert in any Latin American country, you know, and I mean, just you saying it's even more complicated in Colombia.

I think, yeah, as the less the country is used to people relocating to it, the more you're going to need an expert.

[Pablo Arias]

So some countries are easy, super easy, Mexico makes it fairly easy, Costa Rica tough, Panama easy, Colombia tough, Nicaragua is horrible, like Central America in general is horrible.

[Richard Bexon]

Yeah. I mean, a lot of people, I mean, you'd mentioned Colombia there, we'd mentioned Panama, we'd mentioned Costa Rica. How would you summarize the differences between the countries and what country is better for what type of people?

[Pablo Arias]

That's a tough one. That's a tough one. I often say, and I travel a lot, last year I had an apartment in Panama City, this year I'm traveling every two months to Mexico, visiting different places to just to network and to build a business in Mexico.

My conclusion is somebody came to Costa Rica, they fell in love with the Costa Rican, just like Mr. Backson. Yeah, true. Yeah, right.

Yeah. Somebody went into Mexico and they really like tacos. A lot of people make this decision based on things like that.

[Richard Bexon]

Which country has the best bureaucracy, Pablo, in general? Like of living? Panama has the least bureaucracy.

[Pablo Arias]

Panama, well, Europe first, Portugal, Spain are going to be less. Panama, I think, is like even in immigration case in Panama, it's like two months, two months. Costa Rica, one year.

The same thing with customs, shipping and customs, Costa Rica customs to do it properly, like to do it the way you're supposed to by the law, takes a month. To do customs for household goods or for a car, Panama for household goods, I've done it in three days, in and out. The container gets to the port, present the paperwork and the container is out.

So Panama is the bureaucracy, it's more business oriented and because it's more business oriented and maybe because they have the Americans living so many years in Panama, that, you know, increases the business like side of it.

[Richard Bexon]

There are other things. What's the most affordable country to live in? Which would you say is the cheapest?

How would you rank them?

[Pablo Arias]

I think Mexico and Colombia out of this, out of Latin America could be some of the most less expensive ones, Mexico and Colombia. Panama has increased their costs over the years. So I've seen only a difference of maybe 10, 15% versus Costa Rica.

So, yeah, Mexico, Colombia, Panama, but there are other countries in South America that are inexpensive. I'll say Ecuador, it used to be a big place for expats to move to. And it just all of a sudden loses his charm because how the government runs the country.

That's Ecuador, it's like, oh, yeah, I don't want to be in Ecuador because...

[Richard Bexon]

That's the political instability. Exactly.

[Pablo Arias]

The same as Nicaragua, Nicaragua is inexpensive, but you have that, you don't want to make an investment there. You don't want to buy anything. You know what's going to happen in the next election or something.

[Richard Bexon]

I mean, I have friends that own property there and they basically just treat it as like, well, at any moment, this can be taken away from me. You know, that's how they think about it. I mean, legally, the framework, probably they can't, but again, you just never know.

So yeah, you know, it's very, very different. But it's amazing how different these countries are and you really need to go to them because they are so different. Costa Rica is completely different than Nicaragua, which is completely different than Panama, which is completely different than Mexico and completely different than Colombia.

[Pablo Arias]

But I have to say, I'm a Costa Rican, but I'm not attached to any country. I guess I'm a digital nomad at heart. The only reason I'm here most of the time is because I have roots, family investments and kids.

I want to be around my kids. So I could be living in Mexico or Panama or any place. But what I have to say good about my country, Costa Rica, is like, I think some of the social services, education, health are pretty good.

There are some things that they, I was in the internations the other day. I was telling this story. Internations is a hub, a place for you to network with other expats.

A couple of days ago, I was telling this story, Costa Rica has put an investment on education to educate their population in different ways. I remember when I was a kid, 10 years old, watching a cartoon telling me I need to be nice to the gringo. Like that was the message.

I remember another video of a taxi driver. It wasn't a cartoon, but it was a little bit commercial. A taxi driver driving, met a tourist.

The tourist looked at his purse or wallet and all of a sudden, they finish and end up exporting leather products to the United States. That was the message from the National Institute of Tourism, what, 30 years ago. So that's the type of education that Costa Rica has versus Panama.

So they asked me, what's the difference between Costa Rica and Panama? That's one of them. The education, the population is nicer.

We're just more used to more often to receive other people. Another case of education is through COVID. Out of COVID, I don't know if you remember, but Costa Rica ended up being the best place to visit after COVID.

And a lot of it has to do with education. And I remember interviews with the health minister, and they were explaining Costa Rica, the CAJA or the social security, have a budget of, I don't know, X amount of millions of dollars for education on health. So we already knew, watch our hands.

If you're going to cough, use your arm. Because we have been educated. So in general, through the pandemic, we suffer less because, you know, Nicaragua, they didn't do anything.

Mexico, they have to start with a budget for educating their population. So education-wise, and also the percentage of people that speaks English in Costa Rica. So it's got, it makes things easier for the expat, and it's a good place.

[Richard Bexon]

I think it's a little higher quality of living, but it's also the expense that comes with it as well. Yeah. You know, it's not a mature destination.

[Pablo Arias]

And it's, anytime you go to a little bit more developed place, it's a little more expensive. Yeah. That's it.

[Richard Bexon]

Well, what services and businesses do you think are still lacking in Costa Rica? I mean, you have a lot of conversations with people. I mean, and a lot of people are coming here, a lot of people are here, even Costa Ricans that are like, I'd like to start my own business.

I mean, what services and businesses do you think are still lacking?

[Pablo Arias]

Okay. I think one that I'm interested, but I have researched a little bit is self-storage units. Yep.

I see in the Central Valley, there's an offering in the Central Valley. But if, let's say you go to Coco, maybe one place, there's some areas, but you don't have maybe Samara, there is very little. And because I deal with people who are moving, they need this storage services.

I realized, oh, there's nothing in Samara like this. There is nothing left here, Nusara or other places. So I think I would not go very big, a lot of units, but it's an interesting business that is also in the real estate space.

So therefore it's safe. So you have your money tied in an asset that is safe, that has a demand. So that's one of the businesses that I'm looking at, and it's also because the type of service I have, I help experts and it's a service that a lot of them are used to use, they're used to hiring this type of service when they're moving or when they're in transition.

[Richard Bexon]

Definitely. Well, maybe you've already answered this question because my last question to you, if you inherited $500,000 and you had to invest it into a business or real estate in Costa Rica, what would you invest it in?

[Pablo Arias]

I really like real estate in general. So it's safe. Yep.

Self storage is one of those that I really like. I would probably, if it's me, me, me, the way I'm trying to build my business, I'm trying to scale this thing to 25 other countries. So I would not put the money in Costa Rica.

I would just diversify it.

[Richard Bexon]

I actually- If you had to do it in Costa Rica, you mentioned real estate there. I mean, what would you buy and where would you buy?

[Pablo Arias]

If it has to be in the real estate, it will probably be in a service of a storage. Where would you put it? It will have to be in Guanacaste.

I will probably research the competition of what's out there. There is some competition in Tamarindo, a little, little competition in Cocoa, Liberia. It's a bigger city and I don't see anybody with the self storage in it.

[Richard Bexon]

Correct. I mean, if you can do that out by the airport, that could be very interesting.

[Pablo Arias]

Yeah. You know, because I mean- Another business that I really like is Customs Bonded Warehouse, which is, there is some bureaucracy there, so you have to deal with the bureaucracy, but you manage that having a bonded warehouse, it's mandatory for every piece of cargo package that comes into the country to be stored in this place. And it's expensive.

Oh yeah.

[Richard Bexon]

And they charge per day.

[Pablo Arias]

It's like, they charge per day, $20 per day. It just depends on the size of the shipment, if you have a car, whatever, but it's an interesting business that I, for years, I dreamed about having $2 million. That's not a $500 investment, $500,000.

That's a $2 million minimum investment, if you want to have something nice and really compete in the market. But it's guaranteed, companies and people who rent anything into Costa Rica has to pay a $2 million storage fee. That also very related to my business at Customs.

[Richard Bexon]

Well, I'm sure you're going to have a few people reach out to you. I mean, I've had a few people reach out to me about self-storage. I'm like, it's just not a world that I know.

So I'm sure a few people listening to this podcast will reach out to you about maybe partnering or exploring kind of that for you, but really appreciate, as always, you joining us on the podcast and kind of sharing your knowledge with us, Pablo. Thank you so much. It's a pleasure.

No worries. Have a great day.

[Pablo Arias]

Bye-bye.

[Richard Bexon]

Bye.